Joint Chairman-CEO Title and Compensation Package Tied to Stock Price to Remain After Iger Steps Down
The Walt Disney Co. will continue to combine the roles of chairman and CEO under one executive.
So spoke Mouse shareholders. Despite attempts by a group of high-profile and very vocal investors to split the top jobs at the Mouse House, currently both held by Robert Iger, just 35.3% of those gathered at the company’s annual shareholder meeting approved a measure to divide the jobs on Wednesday once Iger’s successor has been chosen.
The votes were submitted before the meeting and announced at the gathering.
Iger also unveiled the first images of a model of the Shanghai Disney Resort featuring the Shanghai Disneyland park that will likely become a hallmark of his tenure at the company. It’s one of a number of big initiatives that, along with the company’s soaring stock price, supporters say, make him well deserving of a the dual leadership role.
“With Shanghai Disneyland, we’re creating a one-of-a-kind destination that is authentically Disney and distinctly Chinese. We believe this will be one of the most spectacular Disney experiences yet and an important part of our future,” Iger said. The gates will open at the end of 2015. Images illustrate an 11-acre green space at the center of the park and a look at the design and scale of Enchanted Storybook Castle, its central attraction. The resort includes two themed hotels, a 495,000 square foot dining and retail complex, a lake and transportation and parking hubs.
The Connecticut Retirement Plans and Trust Funds had proposed to separate the roles, backed by giant pension fund CalPERS, the Netherlands’ PGGM Investments, and the largest proxy advisory services ISS and Glass Lewis. CalPERS maintains a $260 million investment in Disney.
The orgs also opposed Disney’s current compensation plan, which they said was “fundamentally flawed,” that links pay to Disney’s stock performance, but shareholders voted down a proposal to change that, as well, with 57.6% approving the existing plan.
Iger has held the chairman and CEO posts since the company merged the roles at another shareholder meeting in 2012. He is slated to step down as CEO in March of 2015, after which he will continue to serve as executive chairman.
Critics argued that having one exec hold both roles, no matter how competent, gives them control over the board, a group that’s meant to judge his performance.
“The chairman is there to lead the board and represent the shareholders and the CEO runs the company and leads the management team,” one shareholder said at the meeting, held this year from the Orpheum Theater in Phoenix.
As for the compensation plan, Iger received a 20.3% pay raise for fiscal 2012, worth $40 million, based on Disney’s stock rising 76%. Company’s stock is now trading at an all-time high and is up 30% over the past year. Iger has been CEO since 2005, with Disney’s shares up 138% since then.
All 10 members of the board were re-elected with overwhelming support, with 99.6% of Disney’s shareholders approving to keep Facebook’s Sheryl Sandberg on Disney’s board.
Roy P. Disney, grand-nephew of Walt, supported Iger during the meeting, saying “Bob understands what Walt knew: It takes more than one person to run a company. This is a company that should be celebrated as a company of how to do a good job.”
Disney’s gathering attracts a faithful fanbase concerned over small details like the quality of the lighting at a shuttle bus station at one of the company’s theme parks or the addition of more villas at Anaheim’s Grand Californian Hotel.
After watching the latest trailer for Marvel Studio’s “Iron Man 3” and viewing the first model images of Shanghai Disney Resort, shareholders brought up questions over Disney’s decision to build Starbucks stores inside the company’s theme parks.
“We miss our coffee and we didn’t want to see it change,” said one shareholder.
But Iger said the deal with the coffee giant came out of complaints by many more guests over the quality of its brew.
“Over the years, one of the biggest criticisms we got was that our coffee wasn’t good enough,” Iger said. “Since Starbucks has done so well, we thought it would be a great idea to serve our guests better coffee. It’s quickly become one of the most popular Starbucks in the company and we’re going to add more.”
Another shareholder requested that more of the company’s collectible pins be “made in America.”
And while Iger said that most of the company’s goods are made through third party licensees, who operate their own factories overseas, Disney is looking into how to add more jobs in the United States and add manufacturing Stateside.
“We’ve managed to figure out how to reach people in countries far and wide,” Iger said. “With that comes investments in and manufacturing in markets outside of the Untied States.”
One eight-year old shareholder named Corey who said she’d attended six meetings, asked, “What’s more important to a Disney movie, what critics say or what kids say?”
“How did you miss two meetings?” asked Iger. “Absolutely kids. Don’t let anyone tell you otherwise.”